Academic journal article Monthly Labor Review

The Growth of Income Inequality in the United States

Academic journal article Monthly Labor Review

The Growth of Income Inequality in the United States

Article excerpt

Wealth and income inequality, specifically the perceived widening of the gap between rich and poor, has been in the public discourse for quite some time. In "Divergence: wealth and income inequality in the United States" (Federal Reserve Bank of Atlanta, EconSouth, September--December 2014), economic policy analysis specialist Nicholas Parker looks at the topic and highlights recent trends and some new research that explores potential links to monetary policy.

The author notes that researchers have observed a steadily widening gap in the distribution of income and wealth in the United States, with the top 5 percent of households accruing an increasing share of the resources. Although the trend paused during the Great Recession because of the larger wealth losses for those at the top of the distribution as stock market prices fell, it has since resumed partly because of slow labor market recovery and sluggish wage growth.

So what's behind the growing gap? Parker says that preliminary research points to several potential factors, including both a decrease in the real value of the U.S. minimum wage and limited job opportunities for people without a college degree. He also notes disparities in educational attainment, especially for postsecondary education, that may have contributed to income inequality. …

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